| | JUNE 20208CIOReviewIN MY OPINIONThe long-winded road of digital success­ an Adobe storyBy Carsten Krause, SVP Corporate IT and Global IT Operations, ModusLinkThis is a story about digital transformation and re-inventing your business to capture new markets and staying relevant rather than being disrupted. The company I chose for this article is Adobe because its digital journey showcases the willingness to embrace digital in corporate culture and DNA, which persevered in spite of hurdles and roadblocks the company faced.Founded in 1982, Adobe is on track to reach 13 billion dollars in 2020 based on its successful implementation of digital strategy, embracing new business models and uncovering new growth markets.The Adobe success story is also a story that proliferates industries where leading software companies are being disrupted by more nimble players forcing them to look at new ways to go to market, acquire new capabilities in acquisitions and take calculated risk as a pre-emptive strike to disrupt rather than being disrupted resulting in loss of revenue and market share. However, this is also a story that underpins the need for constant innovation in an era of rapid change driven by changing customer preferences and by leveraging technology that enables new business models. With Adobe's roots in the desktop publishing space, the leadership team around the newly appointed CEO Shantanu Narayen had to make a tough call.In 2008 Adobe was in a sustaining growth mode dominating the content publishing and creative software space, but at the same time, revenue growth was flat. There is a case to be made that there was no reason to look beyond and keep pushing the same business model that was the foundation for its success so far. However, this was also a time when some of the underlying conditions for business success were changing, fueling new entrants to the market seeking to disrupt that space. With a history of product innovation, Naranyen pulled his team into blue-sky brainstorming sessions asking his team to broaden the lens on how they were looking at opportunities, markets, and solutions.That included looking at new market trends, changing customer needs, and adjacent markets that the company was not currently serving. This was also the time how content was created changing, how content was consumed was changing, and where the content was going to be monetized was changing.Customer preferences were changing rapidly, and the internet-enabled subscription models propelling the growth of companies like Salesforce and Dropbox.In light of these forces of change, Adobe's leadership took a leap of faith to connect their solutions to the cloud and driving towards a subscription-based model, ultimately completely withdrawing from a perpetual licensing model.This was a bold move that was not well received initially by the market, and Adobe customers came with additional restructuring cost and resulted in initiallyAdobe's stock prices to fall significantly.When Adobe's leadership announced their own MAX convention in 2013 to withdraw from their package pricing model and move to a cloud subscription model they faced a backlash from their customers running petitions to re-introduce package pricing.
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